Stockholm (NordSIP) – The Nobel Foundation partnered with Impact-Cubed to conduct an analysis of the carbon footprint of the ten externally managed strategies in its listed equity portfolio.
The analysis was conducted at the level of individual funds as well as in aggregate terms. It showed that the aggregated investments have a positive net sustainability impact overall, with especially strong results on environmental externalities (carbon, waste and water efficiency) and SDG alignment of products and services, according to a press release. The Nobel Foundation will repeat this analysis every six months to track the sustainability performance of their managers individually and in aggregate.
“A net positive outcome across a total portfolio is not at all a given even for an asset owner who select their managers based on sustainability criteria”, said Impact-Cubed founder Larry Abele. “There is a large variation in the focus and strategies employed by ESG funds, which can result in them cancelling out each other’s benefits at total portfolio level. If an asset owner is not paying attention to this, they may be invested in a climate fund and a governance quality fund who when put together yield a set of climate and governance exposures indistinguishable from an index-tracking portfolio. This is not the case for Nobel who have selected their managers in such a way that the foundation’s equity portfolio has a strong sustainability profile.”
“We have a strong commitment to investing sustainably and this involves adopting innovative practices,” the foundation’s CIO Ulrika Berman who spearheaded the initiative commented. “Integrating sustainability into the selection and monitoring of individual managers is becoming an established practice, but we are also thinking about impact in a systematic way in terms of our entire equity portfolio.”
Impact-Cubed‘s Portfolio Impact Footprint tool measures the impact of any portfolio of listed securities in terms of sustainable development and the UN SDGs. A free version of the tool is available for free to be used by any investor to footprint their portfolio. Impact-Cubed was originally used to measure investment impact in-house by Auriel Equity Investors LLP. It was spun off as a separate company (currently seeking B-Corp Certification in the UK) in summer 2017 with the intention of becoming a self-sustaining service to the investment community. The portfolio model has since won the IRRC Institute Research Award in 2018, further validating the approach.